Proposed increases in the regulation of ancillary mining
activities, and new offences and enforcement powers, should prompt
mine operators to review existing environmental management and
rehabilitation programs.

On 31 May 2017, the Mining and Petroleum Legislation Amendment
Bill 2017 passed the upper house of the NSW Parliament and awaits
approval from the lower house before becoming law.

The Bill will make various amendments to the Mining Act 1992,
Mining Regulation 2016 and Petroleum (Onshore) Act 1991 which:

clarify how "ancillary mining activities" (currently
known as "mining purposes") are carried out with regard
to mining leases and mineral claims;

establish new offences for providing false or misleading
information under the Mining Act and the Petroleum Act.

Ancillary mining activities

The NSW Government has acknowledged that ancillary mining
activities are the key activities, facilities and infrastructure
used to directly support primary mining operations. Examples of
ancillary mining activities include the construction, maintenance
or use of tailings dams or stockpiles of displaced soil from mine
operations.

The Bill would simplify the regulatory regime for these
activities and, in doing so, strengthen the regulation of them.

The proposed definition of "ancillary mining
activities" adopts and builds on the current definition of
"mining purposes" in the Mining Regulation and inserts a
new activity: the environmental management, protection and
rehabilitation of land on which an ancillary mining activity is
being or has been carried out.

The Bill introduces a concept of "designated ancillary
mining activity", which is focused on reservoirs, dams
(including a tailings dam), drains and water races, and the
removal, stockpiling or depositing of overburden, ore or tailings
associated with mineral extraction or beneficiation.

Under the Bill, a "designated ancillary mining
activity" can be carried out only:

within the area of an authorisation under the Mining Act (eg.
mining lease) if it is carried out in accordance with that
authorisation; and

·outside such an area if it is in the immediate vicinity
of, and directly facilitates, the relevant mining lease and is
carried out under that mining lease, or another mining lease which
authorises the carrying out of the activity.

The Bill will also facilitate the consolidation of Mining Act
authorisations for ancillary mining activities, which should make
the approval pathway, and post-approval administration and
compliance, simpler and more cost-effective.

The Hon. Don Harwin, Minister for Resources, also emphasised, in
the Bill's Second Reading Speech, that the changes under the
Bill will impose security deposits, rehabilitation obligations and
compliance and enforcement powers on ancillary mining activities,
including any relevant planning and environment regulation (eg.
obtaining development consent or environmental protection
licences). The Minister described this as a "fit-for-purpose
regulatory framework".

The Bill would also impose maximum penalties for unauthorised
carrying out of designated ancillary mining activities of:

$1.1 million for corporations, plus $110,000 for each day the
offence continues; and

$220,000 for individuals and/or five years' imprisonment,
plus $22,000 for each day the offence continues.

Currently, these maximum penalties apply to the unauthorised
carrying out of mining purposes.

Enforceable undertakings

The Bill seeks to address minor gaps in the enforceable
undertakings framework following the NSW Government's reform of
the regulatory framework for the resources sector in 2015.

To improve compliance and enforcement, the proposed changes
allow for criminal proceedings to be commenced in the NSW Land and
Environment Court for serious breaches of an enforceable
undertaking under the Mining Act or the Petroleum Act (rather than
the NSW District Court).

In addition, the Secretary would be required to publish every
enforceable undertaking under the Mining Act and the Petroleum Act
that is accepted by the Secretary, including any variation or
withdrawal.

New offences and increased penalties

The Bill increases the maximum penalty that may be imposed by a
court for the offence of providing false or misleading information
to $1.1 million for corporations (currently $110,000) and $220,000
for individuals (currently $55,000).

The Mining Act and the Petroleum Act will also be amended by the
Bill to include a new offence relating to providing false or
misleading information by persons in connection with the holder of
an authorisation or title.

This new offence requires a holder to ensure that an agent,
employee or any other person acting on behalf of the holder does
not provide false or misleading information, records or other
material in purported compliance with any requirement under the
Mining Act or the Petroleum Act (either knowingly or recklessly).
This offence will carry the same maximum penalties noted above for
the offence of providing false or misleading information.

The Bill also provides a defence to prosecution if the holder of
an authorisation or title establishes that all reasonable steps
were taken to prevent the offence.

Although the Government has indicated that this essentially
codifies the law of agency, we think it goes further and places a
clear obligation on mine owners and operators to keep a close eye
on their contractors.

Next steps

Mine operators and other proponents should consider the impact
of these reforms on current operations and environmental management
programs.

In particular, holders of an authorisation or title should
review all relationships with agents, employees and other persons
acting on behalf of the them to minimise the risk of being subject
to the new offence of those associated persons providing false or
misleading information.

Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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